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ABC Ratio Analysis: Student Name Institution Course Tutor Date
ABC Ratio Analysis: Student Name Institution Course Tutor Date
Student Name
Institution
Course
Tutor
Date
2
ABC is a specialty retailer with total current assets of $164000 comprising of cash,
accounts relievable, interest receivable and inventories as $92000, $21000, $1000, and $50000
respectively. Its total current liabilities were $56000 comprising of $48000 accounts payables
and $8000 interest payable. Using this data, quick, current, and cash ratios of the ABC Company
= (164000-50000)/56000
= 1.9643
= 164000/56000
= 2.9286
= 92000/56000
= 1.6429
The industry average current ratio from IBIS World is 1.27. It, therefore, implies that
ABC Company has a better liquidity compared to the industry average, showing a good financial
The total assets, total equity, total debt and long-term debts for ABC’s are provided as
$292000, $80000, 136000, and $156000 respectively. Using these data, one can compute its
= 136000/292000
3
= 0.4658
= 80000/292000
= 0.2740
= 136000/156000
= 0.8718
The average specialty retail industry debt ratio on the IBIS World database is 0.68. ABC
with a debt ratio of 0.27 shows that it has a better leverage compared to its peers in the industry.
The company uses less debt compared to its peers to finance its assets.
The analysis above demonstrates that ABC has a better liquidity and leverage compared
to industry average. This would imply, therefore, that the company has a better financial health